China has just pulled the ultimate trump card in its trade war with the United States, and it’s not tariffs or tech bans—it’s rare earth minerals, the unsung heroes of modern technology. But here’s where it gets controversial: Beijing’s latest move to tighten control over these critical resources has sent shockwaves through global supply chains, leaving Washington scrambling for a response. Could this be the game-changer that shifts the balance of power in the world’s most high-stakes economic showdown?
Last week, China’s Ministry of Commerce dropped a bombshell with its innocuously named Announcement No. 62 of 2025. This document isn’t just bureaucratic red tape—it’s a strategic masterstroke. It imposes sweeping restrictions on rare earth exports, minerals essential for everything from smartphones to fighter jets. And this is the part most people miss: China controls nearly 70% of the global supply of rare earths used in electric vehicle motors, according to Natasha Jha Bhaskar of the Newland Global Group. By requiring foreign companies to seek approval for exporting even trace amounts of these minerals, Beijing has effectively grabbed the steering wheel of the global tech industry.
The U.S. response? President Donald Trump threatened a 100% tariff on Chinese goods and export controls on key software. U.S. Treasury Secretary Scott Bessent didn’t hold back, declaring, ‘This is China versus the world. They’ve pointed a bazooka at the supply chains of the entire free world, and we’re not going to have it.’ But China fired back, accusing the U.S. of escalating tensions with 20 anti-China measures in just 20 days after the Madrid trade talks. The tit-for-tat continued this week with both nations imposing new port fees on each other’s ships, reigniting a trade war that had been on a fragile truce since May.
Here’s the kicker: Rare earths may account for less than 0.1% of China’s GDP, but their strategic value is immeasurable. As NYU’s Prof. Sophia Kalantzakos puts it, ‘Their economic value to China may be tiny, but their strategic value is huge.’ China’s dominance in rare earth processing isn’t an accident—it’s the result of decades of investment in talent, research, and infrastructure. Meanwhile, the U.S. and its allies are years behind, despite pouring billions into developing alternative supply chains. Australia, with its vast rare earth deposits, could be a contender, but its processing infrastructure remains underdeveloped, making it an expensive and distant second.
Take the F-35 fighter jet, for example. A single plane requires over 400kg of rare earths for its stealth coatings, motors, and radars. Without China’s supply, production could grind to a halt. Marina Zhang of the University of Technology Sydney warns, ‘Even if the U.S. and its allies make processing rare earths a national priority, it will take at least five years to catch up with China.’
But here’s the controversial question: Is China’s grip on rare earths an unstoppable advantage, or does the U.S. still have a few aces up its sleeve? Some experts, like Jiao Yang of Singapore Management University, argue that Washington could leverage tariff reductions to ease the pain on Chinese manufacturers, who are already reeling from the trade war. Others suggest ramping up tech restrictions, like the White House’s recent ban on Nvidia chip sales to China. But as Prof. Naoise McDonagh points out, ‘Measures targeting Beijing’s tech industry may slow China, but they won’t stop it dead in its tracks.’
China’s willingness to endure short-term economic pain for long-term strategic gains is clear. As Prof. McDonagh adds, ‘China can carry on even if it costs a lot more under U.S. export controls. But if China cuts off rare earth supplies, it can actually stop everyone’s industry. That’s the big difference.’
As Trump and Chinese President Xi Jinping prepare to meet later this month, the rare earth restrictions loom large. Beijing has found its ‘best immediate lever’ to pressure Washington, according to Natasha Jha Bhaskar. But will it backfire? Or will it cement China’s dominance in the global tech race? What do you think? Is China’s rare earth strategy a brilliant power play, or a risky move that could unite the world against it? Let us know in the comments—this debate is far from over.
